The Oil Palm

French Senate’s Palm Oil Tax: The Good, The Bad and The Ugly

Last week, the French Senate’s Sustainable Development Committee rejected the discriminatory tax against Palm Oil, showing their support to 300,000 Malaysian small Palm Oil farmers and more broadly to France-Malaysia relations. This was a good step in the right direction.

Upon learning of the Committee’s rejection of the tax, the CEO of the Malaysian Palm Oil Council, Dr Yusof Basiron, remarked that it was time for “President Hollande to reject the tax,” and that the “game of appeasing special interests at home at the expense of France, and Europe’s, relations in South East Asia, needs to come to an end.”

However, the rejection by the Committee was not the end of the legislative process.

The bad news for Malaysian Palm Oil is that Senators from the Communists, Greens, and Socialists, have now tabled amendments to reinstate the Palm Oil tax. Senators Evelyn Dider (Communist); Jean-Jacques Filleul (Socialist); and Ronan Dantec (Greens) have demanded that the tax passed by the National Assembly also be supported by the Senate.

These amendments will be considered at the plenary session. The Senate plenary debate will start on Tuesday 10 May and a vote is expected on Thursday 12 May.

Once the Senate passes the Bill this week – either with or without the palm oil tax – the Bill is expected to move to a Mixed Parity Committee (CMP). The CMP is a Committee composed of members of both the National Assembly and Senate, with the aim of finding an agreement. The text of the Bill will be amended during the CMP discussions. The reality of this means that even if the Senate plenary sessions this week removes the palm oil tax – the tax could still be reintroduced into the Bill at the CMP stage.

In summary, the vote in the Sustainable Development Committee was a good step in the right direction; the re-tabling of the tax by Senators was a bad retrograde move; and the vote in the Senate this week could bring the ugly reality of a Palm Oil tax back to life.

New French Attempts to Tax Palm Oil Coming

If the Biodiversity Bill doesn’t include a Palm Oil tax increase, it is likely that Green Senators will continue their attempts to reintroduce the tax in the forthcoming food products debate in the French Parliament.

Socialist MP Razzy Hammadi is currently drafting an opinion report on the taxation of food products. The report is expected to be finalized before the summer, and casual observers of the palm oil debate in Paris believe this will form the basis for a finance bill in late 2016.

Holding French Leaders Accountable

In 2013, then-Prime Minister Ayrault promised not to tax Palm Oil; President Hollande has promised not to increase taxes at all. As part of this promise, the Palm Oil tax proposal must be dropped completely. The Senate’s Sustainable Development Committee took a step in the right direction: Senators from the Communists and the Green – as well as Socialists – have taken a step backwards. Now it is up to President Hollande to follow through on his word and that of his governments